Think of the 315 million as the hiring bonus for brining on Arriana Huffington.

Huffington Post has 70ish employees and another 6000 bloggers who write for free. I suspect a big chunk of those 6000 free content creators aren't going to keep working there, especially after their boss just got 300 million in cash.

What was the annual return for HuffPo 5 years ago? Basing the value on last year's returns isn't a good way to look at a dynamic business. Now if this was a pretty stagnant and static business I would agree with you. Welcome to the world of intellectual property.

My jaw dropped at that number. I mean mint.com only went for like $100M and it actually has a great product/service and was bought by its larger competitor (Intuit). Then again there does seem to be a trend lately towards rather obscene website valuations (Facebook $50B, Groupon $6B). I read HP but the site is ugly and continues to carry a lot of utter crap. Their health section is basically conspiracy theory and snake oil central.

Yeah I don't think a lot of people will be contributing for free to these news blogs/aggregation if they know their owners will be cashing out.

Just pointing out that I saw an article that said next years profits are forecast at $30 million. I also read that this is part of AOL's 80 80 80 strategy.

Can't remember the exact details but the notion was that 80% of all purchasing in the states is done by woman and huff post is apparently very popular with woman and getting a successful woman manager in Huffington on board etc etc. Ie Huffington does seem to know what she's doing, heck I read huffpost. There is a high signal/noise ratio there but they seem too have a wide enough selection of articles/contributors too appeal to a good reader base. Ie just of late their Egypt coverage has been pretty good, and then i flip too the comedy section.

Huffington Post has 70ish employees and another 6000 bloggers who write for free. I suspect a big chunk of those 6000 free content creators aren't going to keep working there, especially after their boss just got 300 million in cash.

QFT. There's going to be a significant problem here. Now that the content providers know what the property is worth, the pay is going to have to go up or the quality is going to have to go down.

Welcome to the world of Intellectual Property. Where, eventually, the help demands cash.

AOL may have just done to itself what Time Warner did when acquiring it.

What was the annual return for HuffPo 5 years ago? Basing the value on last year's returns isn't a good way to look at a dynamic business. Now if this was a pretty stagnant and static business I would agree with you. Welcome to the world of intellectual property.

2010 was the first year it was profitable.

Also remember her business model is based on running one big electronic plantation with 6000 journalists tending to the crops for free (Pretty much tells you what the value of a 4 year Journalism degree is worth) the big risk is what if the slaves revolt and they lose the free labor?

Anyhow when you have the slaves tending the crops for 0 dollars that is a huge margin since you are getting the content for practically 0.00 dollars and then reselling the entire work for profits.

I have to give Big Kudos to Arianna, she figured out how to outbeat the chinese when it comes to lowering the cost of wages, and on top of that the employees being Americans with college degrees. And then she sells the whole electronic plantation for 315M.

I am impressed by her savvy business skills. You can say all you want about how Wall street is evil, but at least the help gets paid a wage. Even Mexicans who cross the border with limited english skills know enough to ask for compensation for whatever labor the provide.

The idea behind this sort of zero-wage contribution model is that people will write for the sake of having other people read their content. Which is unfortunately true especially when we're talking about young people who place inordinate value on exposure and association with a brand like HuffPo. While I think it's total BS and it drives down the market value of journalism skills (and writing skills in general), there's nothing anyone can do about it aside from refusing to participate.

So the question that HuffPo contributors should be asking is "Will I get the same amount of value out of my time that I was getting before the acquisition?" And I'd argue that most of them will conclude that they will, and keep writing, and proudly keep putting "HuffPo Contributor" in their bylines and resumes.

but eh, opinion is a vanity enterprise, no? And it does make sense I think to put your thoughts on HuffPo and get the ego-boosting views and comments rather than on some wordpress site that gets ignored.

Not too different from Groupon, no? Although, when you consider like Ebay, ebay is charging a buck for a few megabytes worth of data.

The idea behind this sort of zero-wage contribution model is that people will write for the sake of having other people read their content.

I've seen magazines devoted to this business model. Overall, I haven't been very impressed. Quality tends to suffer.

Even in the pre-internet era, most such magazines eventually crash and burn. It appears that HuffPo has had one profitable year and then sold out.

Pretty typical, all things considered.

The problem is, if you must pay the plumbers, the electricians, and (here) the sys admins -- everybody who isn't providing direct value, you are eternally vulnerable to the help deciding their resume is already stuffed and spending their time doing something else. Or, finding someplace to get paid (they do exist, you know).

Even writing the Great American Novel for Kindle promises to pay at least something, especially if you know you have some sort of following thanks to your now-terminated career on HuffPo.

The TL;DR is that the apparent success of this sale (the author seems to take it for granted that the "help" keeps writing for it I think) is that real journalism will suffer.

Whether or not that is true, there's a lot of fact and experienced insight from someone who is actually paid by a newspaper.

He also takes some amusing swipes at HuffPo and its liberalism contrasted with the Pirate ethic and sweatshop practices. I wonder if HuffPo's readers will react to that or maybe they won't notice since the copy entertains and reinforces?

An interesting perspective, especially the next time someone from the left brings up dittoheads.

Well that is the big risk, AOL bought for 315M a Plantation with 6000 slaves and the slave master (Arianna). But the big if is will happen if the slaves revolt? A business model based on employees working for free and providing free intellectual capital is pretty iffy. The Majority of Huffington post is intangibles.

My prediction is AOL is going to be doing lots of impairment charges against goodwill in the future

While I could see a small percent of contributors jump ship, why would the rest? If the site was bringing in millions in 2010 they were just as screwed last year as next year if they were in it for the money.

To quote Jayne: " I got a share of this job. 10 percent of nothing is... let me do the math here... nothing, and a nothing... "

While I could see a small percent of contributors jump ship, why would the rest? If the site was bringing in millions in 2010 they were just as screwed last year as next year if they were in it for the money.

I'm not saying that it will certainly happen, but if so: the reaction isn't necessarily the product of rational thought.

Having revenues creep up in the background while you're contributing content doesn't have as dramatic a feel as a press release announcing your boss's $350mil payday..

While I could see a small percent of contributors jump ship, why would the rest? If the site was bringing in millions in 2010 they were just as screwed last year as next year if they were in it for the money.

To quote Jayne: " I got a share of this job. 10 percent of nothing is... let me do the math here... nothing, and a nothing... "

Well, in the magazine business, this has never worked. Maybe on-line is different.

If the "revolt" is going to happen, it probably will happen relatively soon.

Watching their lord and master walk away with a big, public payday whilst they continue to get nothing just might concentrate the mind.

In any case, there probably has been and continue to be turnover. Maybe some authors will work indefinitely for no money. But, up to now, it has been possible to consider HuffPo as a vanity place and the business part separate and insignificant. Not as a moneymaker. Until recently, BTW, according to what I read, it was not a moneymaker. Something you did (instead) "for the cause" to combat Rush et. al.

Now that it is obvious that there's lots of money in it, I wonder how the scribes will react?

At the least, some of them will be looking, as I suggested, to leverage their HuffPo experience to something where they too get paid.

While I could see a small percent of contributors jump ship, why would the rest? If the site was bringing in millions in 2010 they were just as screwed last year as next year if they were in it for the money.

To quote Jayne: " I got a share of this job. 10 percent of nothing is... let me do the math here... nothing, and a nothing... "

Well, in the magazine business, this has never worked. Maybe on-line is different.

If the "revolt" is going to happen, it probably will happen relatively soon.

Watching their lord and master walk away with a big, public payday whilst they continue to get nothing just might concentrate the mind.

In any case, there probably has been and continue to be turnover. Maybe some authors will work indefinitely for no money. But, up to now, it has been possible to consider HuffPo as a vanity place and the business part separate and insignificant. Not as a moneymaker. Until recently, BTW, according to what I read, it was not a moneymaker. Something you did (instead) "for the cause" to combat Rush et. al.

Now that it is obvious that there's lots of money in it, I wonder how the scribes will react?

At the least, some of them will be looking, as I suggested, to leverage their HuffPo experience to something where they too get paid.

But how will they leverage that experience for a paying job when it seems these modern day "Journalists" are fighting for spots to get no pay work? It seems that there will be plenty of fresh Journalism grads willing to work for free so the incentive to pay is zero. The old dawgs from HuffPo will be out of luck when the fresh batch of suckers line up to provide free labor at the electronic plantations.

You assume that they all want to be journalists. This isn't true. Quite a few individuals (with large followings) blog on HuffPo as a platform, to leverage it's wide readership. These include Al Gore, Michael Moore, several popular, non-fiction writers, etc. Blogging/journalism isn't their primary objective; it's something they do on the side to drive attention to their primary gig (whatever that happens to be).

Others do it because it's better than writing in a vacuum. (This is how stuff like ScienceBlogs started.) These people would be writing anyway (for free), so why not have a built-in audience to begin with? This is why people contribute stuff to the NYTimes for free, too.

There are many motivations for writing for a site like the HuffPo. Assuming they're all wannabe journalists is naive.

But how will they leverage that experience for a paying job when it seems these modern day "Journalists" are fighting for spots to get no pay work?

Writing books ("e" or otherwise), writing ad copy, doing PR. Even, for not a few of the HuffPo crowd writing speeches. And, there's still TV and Radio, you know.

And, Ars is a little too in love with the new shiny and assume a dying industry is dead long before it is.

AFAICT, good reporters still make something better than minimum wage. As long as they attract eyeballs to the paper, the fact that the news business is in long term decline will not prevent some of them from getting hired.

AFAICT, good reporters still make something better than minimum wage. As long as they attract eyeballs to the paper, the fact that the news business is in long term decline will not prevent some of them from getting hired.

Yep, and bad reporters make way more. Time to write up another scare piece!

A few bad assumptions here, including the idea that the majority of the value of the site comes from unpaid labor. That's hardly proven, and I believe there are 250 people on staff, and the majority of the hits comes from those writers, and celebrities, not the huge number of people who write for free.

While I could see a small percent of contributors jump ship, why would the rest? If the site was bringing in millions in 2010 they were just as screwed last year as next year if they were in it for the money.

To quote Jayne: " I got a share of this job. 10 percent of nothing is... let me do the math here... nothing, and a nothing... "

Well, in the magazine business, this has never worked. Maybe on-line is different.

If the "revolt" is going to happen, it probably will happen relatively soon.

Watching their lord and master walk away with a big, public payday whilst they continue to get nothing just might concentrate the mind.

In any case, there probably has been and continue to be turnover. Maybe some authors will work indefinitely for no money. But, up to now, it has been possible to consider HuffPo as a vanity place and the business part separate and insignificant. Not as a moneymaker. Until recently, BTW, according to what I read, it was not a moneymaker. Something you did (instead) "for the cause" to combat Rush et. al.

Now that it is obvious that there's lots of money in it, I wonder how the scribes will react?

At the least, some of them will be looking, as I suggested, to leverage their HuffPo experience to something where they too get paid.

Y'know, Ars still has volunteer article writers, in addition to the paid ones. To me, it seems that the HuffPo purchase is very similar to Conde Nast's purchase of Ars, just at a larger scale. Yes, perhaps some writers and readers will seek other venues, but chances are that this will prove to be a profitable platform, at the very least, in terms of exposure.

I do hope that the culture at HuffPo will remain pretty much what it was.

she shoots back "Huffington dismissed the strike Thursday at a conference hosted by PaidContent in New York City. “Go ahead, go on strike,” Huffington said, deriding “the idea of going on strike when no one really notices.”